Chamber
Meeting of the Parliament 20 February 2013
20 Feb 2013 · S4 · Meeting of the Parliament
Item of business
Capital Projects
For the avoidance of doubt, I make it clear that I will vote for the Labour amendment.
Often when we debate capital spend in the chamber, we find ourselves discussing the mismatch between what the Government would like to spend its money on and what it can realistically budget for. However, that is not all that we are discussing today, because the Scottish budget is under severe pressure in both resource departmental expenditure limit and capital. The austerity measures imposed by the UK Treasury are excessive and are sucking the life out of the Scottish and UK economies. Most parties in the chamber, though not all, believe that the chancellor has got it wrong, that it is time for another fiscal stimulus and that a renewed push for growth is long overdue. There was a welcome boost for capital projects from the autumn statement, but public spending on capital remains diminished. Therefore, if the Scottish Government wants to meet its ambitions for infrastructure, it will have to look beyond public budgets.
Frankly, the Scottish Government finds itself in the same position as previous Administrations in Holyrood and at Westminster, or as so many of our local authorities during the Thatcher era, because it must leverage private sector investment into public works if it is to have the slightest chance of realising its ambitions. That is precisely why NPD, just like all the other public-private partnerships that we have known over the years, is so critical.
If I can communicate anything to members today, it will be to stress the urgency of the need for capital investment and job creation in the economy, and the on-going importance of the NPD pipeline. Be in no doubt that the business community will have been watching the infrastructure investment plan and the NPD pipeline, and that some parts of it will be listening to the minister’s remarks today. I am afraid that what we have heard in the chamber will not have reassured the business community or construction firms that Scottish ministers understand the urgency of the calls for investment, or that they are developing the shovel-ready pipeline that we have been promised. I do not think that we have heard a single convincing reason for the NPD pipeline delivering so little, given that we were promised so much.
I started by saying that today’s debate is about more than the mismatch between what the Government wants to do and what it can do within its budget; it is about the mismatch between what the Scottish Government can budget for and what is actually being spent and delivered. We were promised that £353 million would be invested in NPD projects in 2012-13, but the figure turned out to be £20 million. We were told that £686 million would be invested in NPD projects in 2013-14, but the recent budget confirmed that plans have been scaled back to £338 million.
When the Finance Committee asked for an explanation for that reduction, it was told that it was taking longer than anticipated to develop projects and proceed to procurement. When will the proposed procurement reform bill become an act? The Scottish economy does not have a great deal to gain from taking projects out of development hell just to pass them into a protracted and cumbersome public procurement framework. I remind members that Michael Levack, from the Scottish Building Federation, told the Finance Committee that too many capital projects are
“stuck in the constipated public sector procurement system”.—[Official Report, Finance Committee, 26 September 2012; c 1618.]
If the procurement reform bill is to make a substantial difference to Scottish businesses it must be introduced in the Parliament without further delay, so that we can legislate to unclog the system.
15:11
Often when we debate capital spend in the chamber, we find ourselves discussing the mismatch between what the Government would like to spend its money on and what it can realistically budget for. However, that is not all that we are discussing today, because the Scottish budget is under severe pressure in both resource departmental expenditure limit and capital. The austerity measures imposed by the UK Treasury are excessive and are sucking the life out of the Scottish and UK economies. Most parties in the chamber, though not all, believe that the chancellor has got it wrong, that it is time for another fiscal stimulus and that a renewed push for growth is long overdue. There was a welcome boost for capital projects from the autumn statement, but public spending on capital remains diminished. Therefore, if the Scottish Government wants to meet its ambitions for infrastructure, it will have to look beyond public budgets.
Frankly, the Scottish Government finds itself in the same position as previous Administrations in Holyrood and at Westminster, or as so many of our local authorities during the Thatcher era, because it must leverage private sector investment into public works if it is to have the slightest chance of realising its ambitions. That is precisely why NPD, just like all the other public-private partnerships that we have known over the years, is so critical.
If I can communicate anything to members today, it will be to stress the urgency of the need for capital investment and job creation in the economy, and the on-going importance of the NPD pipeline. Be in no doubt that the business community will have been watching the infrastructure investment plan and the NPD pipeline, and that some parts of it will be listening to the minister’s remarks today. I am afraid that what we have heard in the chamber will not have reassured the business community or construction firms that Scottish ministers understand the urgency of the calls for investment, or that they are developing the shovel-ready pipeline that we have been promised. I do not think that we have heard a single convincing reason for the NPD pipeline delivering so little, given that we were promised so much.
I started by saying that today’s debate is about more than the mismatch between what the Government wants to do and what it can do within its budget; it is about the mismatch between what the Scottish Government can budget for and what is actually being spent and delivered. We were promised that £353 million would be invested in NPD projects in 2012-13, but the figure turned out to be £20 million. We were told that £686 million would be invested in NPD projects in 2013-14, but the recent budget confirmed that plans have been scaled back to £338 million.
When the Finance Committee asked for an explanation for that reduction, it was told that it was taking longer than anticipated to develop projects and proceed to procurement. When will the proposed procurement reform bill become an act? The Scottish economy does not have a great deal to gain from taking projects out of development hell just to pass them into a protracted and cumbersome public procurement framework. I remind members that Michael Levack, from the Scottish Building Federation, told the Finance Committee that too many capital projects are
“stuck in the constipated public sector procurement system”.—[Official Report, Finance Committee, 26 September 2012; c 1618.]
If the procurement reform bill is to make a substantial difference to Scottish businesses it must be introduced in the Parliament without further delay, so that we can legislate to unclog the system.
15:11
In the same item of business
The Presiding Officer (Tricia Marwick)
NPA
The next item of business is a debate on motion S4M-05653, in the name of Gavin Brown, on capital projects. I remind members that this and the subsequent deb...
Gavin Brown (Lothian) (Con)
Con
Our objective this afternoon is to have a focused debate on the non-profit-distribution pipeline, a Scottish Government flagship programme that was first ann...
Jim Eadie (Edinburgh Southern) (SNP)
SNP
Notwithstanding the member’s characteristically reasonable tone, would he not like to take the opportunity to apologise to the people of Edinburgh for the ex...
Gavin Brown
Con
That was a fairly predictable intervention from a Scottish National Party back bencher. The only surprising aspect was that it took one minute and 56 seconds...
The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney)
SNP
Before Mr Brown proceeds much further in his analysis, will he acknowledge that one of the reasons why the Scottish Government has had to embark on an NPD pr...
Gavin Brown
Con
Long before the economic crash, we had PFI and public-private partnerships. At that time, the then wanting-to-be Scottish Government had a not-so-clear plan ...
John Swinney
SNP
Will the member give way?
Gavin Brown
Con
I am happy to.
John Swinney
SNP
For completeness, would Mr Brown observe and confirm the fact that the Scottish Government has had its capital budget cut by 26 per cent by the United Kingdo...
Gavin Brown
Con
It has never been denied from this side of the chamber that, over the course of the spending review, the Scottish Government budget has been reduced in real ...
The Presiding Officer
NPA
You must bring your remarks to a close.
Gavin Brown
Con
We ask the Government to publish the list for the year before, to explain why so little has been delivered thus far and why little will be delivered next yea...
The Presiding Officer
NPA
Let that be an example to everyone—Mr Brown finished bang on time.14:50
The Deputy First Minister and Cabinet Secretary for Infrastructure, Investment and Cities (Nicola Sturgeon)
SNP
I welcome the debate, not least because it gives me the opportunity to outline the progress that the Scottish Government is making in our capital programme i...
Willie Rennie (Mid Scotland and Fife) (LD)
LD
Will the cabinet secretary take an intervention?
Nicola Sturgeon
SNP
If the member lets me make a bit of progress, I will give way in a moment.It is because we believe that capital investment is fundamental that we published t...
Gavin Brown
Con
Just for clarity, how many of the NPD projects were delivered on the ground in 2012?
Nicola Sturgeon
SNP
I am coming on to the NPD programme.Does Willie Rennie still want to intervene?
Willie Rennie
LD
I am intrigued by the cabinet secretary’s UK Government angle. Is she saying that the UK Government forced the Scottish Government to mishandle the NPD progr...
Nicola Sturgeon
SNP
The UK Government, of which Willie Rennie’s party seems to be a proud member, slashed this Government’s capital budget by 26 per cent. If Willie Rennie canno...
Richard Baker (North East Scotland) (Lab)
Lab
Mr Brown has brought a very important debate to the chamber, given ministers’ repeated comments of how crucial their NPD programme is to their economic strat...
John Swinney
SNP
In the previous UK Government’s final budget in March 2010, public sector net investment was forecast to fall in cash terms from £40 billion in 2010-11 to £2...
Richard Baker
Lab
Mr Swinney is making a similar claim to that of George Osborne. According to Channel 4 FactCheck, latest Office of National Statistics figures show that Mr O...
The Deputy Presiding Officer (John Scott)
Con
Order, Mr Swinney.
Richard Baker
Lab
Indeed, the Scottish Futures Trust won an award in the 2012 public-private partnerships awards as the best PPP promoter. I have not seen the shortlist for th...
Nicola Sturgeon
SNP
Does Richard Baker not know that the schools for the future programme is governed by a national programme board, which includes representatives from local go...
Richard Baker
Lab
Will the cabinet secretary therefore tell us the result of that dialogue and what the impact on local educational goals has been of the Scottish Government’s...
The Deputy Presiding Officer
Con
Speeches should be up to four minutes, please. We are very tight for time.15:03
John Mason (Glasgow Shettleston) (SNP)
SNP
I think that most of us would agree that capital spending is an extremely good thing and that spending on housing in particular has many benefits beyond the ...
Margaret McCulloch (Central Scotland) (Lab)
Lab
For the avoidance of doubt, I make it clear that I will vote for the Labour amendment.Often when we debate capital spend in the chamber, we find ourselves di...